Mitigating moral hazard with usage‐based insurance
研究了基于使用量的保险（UBI）为何市场采纳率低，发现只有当监控技术足够精确时，保费激励才能缓解道德风险，使投保人受益。
Abstract Technological progress has improved insurers' ability to monitor policyholders and has led to usage‐based insurance (UBI) contracts that incorporate behavioral risk factors in pricing. Economic theory predicts that any informative monitoring signal is adopted in equilibrium. In practice, the demand for UBI is still low to date with market shares in the single digits. We modify the standard moral‐hazard model in insurance economics by trading off a simpler effort model for a richer strategy space, and by focusing on the use of monitoring for premium differentiation. In our model, an informative monitoring technology is in use if it is sufficiently accurate. Otherwise, the premium incentive from monitoring is not large enough to alleviate the incentive‐compatibility constraint to an extent that would make policyholders better off. Our results help explain the slow adoption of UBI contracts in practice and provide an avenue to increase their appeal to policyholders.